{"id":59010,"date":"2021-08-14T10:54:52","date_gmt":"2021-08-14T15:54:52","guid":{"rendered":"https:\/\/olduvai.ca\/?p=59010"},"modified":"2021-08-14T10:54:52","modified_gmt":"2021-08-14T15:54:52","slug":"inflation-is-winning-and-heres-why-the-fed-seems-content-to-let-it-happen","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=59010","title":{"rendered":"Inflation Is Winning, and Here\u2019s Why the Fed Seems Content To Let It Happen"},"content":{"rendered":"
\n
\n
\n

Inflation Is Winning, and Here\u2019s Why the Fed Seems Content To Let It Happen<\/a><\/h3>\n<\/div>\n<\/div>\n<\/section>\n
\n
\n

\"Inflation<\/p>\n

Photo by\u00a0cottonbro<\/a><\/span><\/div>\n<\/div>\n

The U.S. Treasury\u00a0publishes its balance sheet<\/a>\u00a0annually. The most recent, for fiscal year 2020, is so egregiously out of whack it might be hard to wrap your head around:<\/p>\n

Total Assets: $5.95 trillion<\/strong>\r\nTotal Liabilities: $32.74 trillion<\/strong>\r\nNet Position (total assets minus total liabilities): -$26.80 trillion<\/strong><\/pre>\n
All figures above have been rounded to the nearest billions. The net position also factors in\u00a0-$3.1 billion<\/strong>\u00a0in \u201cunmatched transactions and balances,\u201d which is odd. (Looks like everybody has a little trouble balancing the checkbook\u2026)<\/p>\n
But the obvious focus?\u00a0Liabilities outweigh assets\u00a0more than five to one.<\/em><\/strong><\/p>\n
How will the U.S. government try to correct this imbalance? It\u2019s almost certain they will use one of the only tools they have: inflation.<\/p>\n
In fact, the latest official inflation numbers have come in, which continue the\u00a0trend of rising price inflation<\/a>\u00a0(see chart):<\/p>\n
\n
\"Consumer<\/p>\n
Graph courtesy of the\u00a0U.S. Bureau of Labor Statistics<\/a><\/em><\/p>\n<\/div>\n
Unlike the Fed, which likes to focus your attention on what Wolf Richter calls its \u201clowest lowball inflation measure<\/a>\u201d that\u00a0ignores important prices<\/em>, the BLS chart includes food and energy.<\/p>\n
That\u2019s bad enough. If, however, we use the same measures the Federal Reserve employed in 1990\u00a0like John Williams of ShadowStats does<\/a>, the picture gets a lot worse:<\/p>\n
July PPI Surged to New, Historic Extremes
\nTempered by Unusual Factors, July CPI-U Held at 13-Year High for a Second Month, Just Shy of a 41-Year High
\nShadowStats Alternate CPI Held at Its 41-Year High<\/p><\/blockquote>\n
Don\u2019t let the name \u201cShadowStats\u201d fool you. These numbers are based on the Federal Reserve\u2019s\u00a0own historic metrics<\/em>\u00a0that were retired in favor of the current, less-alarming measures.<\/p>\n
Inflation is bad, and it doesn\u2019t seem likely to get better any time soon\u2026<\/p>\n
\u2026click on the above link to read the rest of the article\u2026<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"
Inflation Is Winning, and Here\u2019s Why the Fed Seems Content To Let It Happen Photo by\u00a0cottonbro The U.S. Treasury\u00a0publishes its balance sheet\u00a0annually. The most recent, for fiscal year 2020, is so egregiously out of whack it might be hard to wrap your head around: Total Assets: $5.95 trillion Total Liabilities: $32.74 trillion Net Position (total […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[18769,124,303,426,534,538,3650,2202],"class_list":["post-59010","post","type-post","status-publish","format-standard","hentry","category-economics","tag-birch-gold-group","tag-central-banks","tag-fed","tag-inflation","tag-monetary-policy","tag-money-printing","tag-us-federal-reserve","tag-us-treasury"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59010","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=59010"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59010\/revisions"}],"predecessor-version":[{"id":59012,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/59010\/revisions\/59012"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=59010"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=59010"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=59010"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}